CarMax Inc (KMX.US) is trading 8% lower on Tuesday after the auto retailer reported disappointing Q4 earnings as used car sales declined due to inflation and waning consumer confidence.
- The company earned 98 cents per share, well below analysts’ estimates of $1.25 per share, though revenue skyrocketed 49.2% to $7.7 billion beating Wall Street forecasts of $7.5 billion mainly thanks to significant price increases.
- Wholesale sales increased 43.8% to a record 149,095 cars, with average prices rising 85.2%, or nearly $5,300 per unit, from last year. On the other hand, retail used unit sales declined 5.2%, with average prices rising $8,300 per unit.
- Additionally management approved a $2 billion expansion of the company's share repurchase program.
- "While the fourth quarter was adversely affected by macro factors, our retail market share growth for the year was the highest it’s been during my tenure as CEO and is a reflection of our ability to deliver the most customer-centric experience in the industry," said CEO Bill Nash.
- Company plans allow all customers to experience an “end-to-end, unaided online experience” by the end of the first quarter while continuing to improve the finance-based portion of the shopping experience.
CarMax (KMX.US) stock fell almost 40% from the ATH at $155.65. Currently price is testing major support at $97.00 which is marked with previous price reactions and 50% Fibonacci retracement of the upward wave launched in March 2020. Should break lower occur, downward move may accelerate towards support at $83.06. Source: xStation5
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